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Tax News: New VAT rate on tourism activities

Tax News

An amendment to the Law on Value Added Tax (VAT) no. 92/2014 dated 24 July 2014 determining a reduced VAT rate on the supply of accommodation services offered by hotels and other accommodation structures regulated by the legislation on tourism has been in effect in Albania since 6 June 2017.

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New VAT rate

Based on the change introduced, the VAT on accommodation services supplied by tourism operators as specified by the legislation on tourism is rated at 6%. Previously, the standard VAT rate of 20% was applicable for such supplies.

Recently, the Albanian tax authorities have explained that the reduced rate of 6% will also be applied to the price of breakfast if this is included in the accommodation price. Starting from June 2017, the tax authorities have also changed the VAT return and VAT sales book templates in order to reflect the amendment of the VAT rate on the supply of accommodation services provided by tourism operators.

Any other services or goods (e.g. restaurant, bar, swimming pool, sunbeds, conference rooms, etc.) supplied by hotels or other accommodation operators shall be subject to a 20% VAT rate and should be presented separately in the invoice to be prepared by the supplier.

Entry into force 

Law no. 71/2017 dated 27 April 2017 is published in the Official Gazette no. 113 dated 22 May 2017 and entered into force 15 days after its publication. 

© 2017 KPMG Albania Shpk, an Albanian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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